State Warns Against Topping Off Gas Tanks / Hearing set as prices keep spiraling up

Erik Ingram, Chronicle Staff Writer

Published 4:00 am, Saturday, April 20, 1996

The state's top energy official urged motorists yesterday to resist the temptation to fill their gas tanks as a hedge against higher prices, saying that hoarding could add to the upward spiral.

With prices at the pump climbing to the highest level since just before the Persian Gulf War in 1991, California Energy Commission Chairman Charles Imbrecht announced that his agency has accelerated its fact-finding activities and cautioned Californians against panicking.

"We're concerned right now that people will panic and begin topping off their fuel tanks each day," Imbrecht said.

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Nearly half of the state's available supply could wind up sitting in car tanks, increasing demand and raising prices further, he said.

Officials recommend not filling a car's tank until it drops below the one-quarter mark.

Imbrecht said his agency is now collecting industry data on supply, demand and price on a daily instead of monthly basis. It is analyzed with an eye toward preventing another oil crisis like the 1978-79 shortages that saw drivers line up for blocks to buy just a few gallons of fuel.

Daily reports, he said, are being forwarded to Governor Pete Wilson who could, if warranted, issue an emergency declaration. "The course of last resort would be some form of rationing scheme, but I don't see that happening," Imbrecht said.

The energy chief said he will testify at Thursday's hearing in Sacramento by the California Air Resources Board when oil company spokesmen and others will be asked to explain the spike in gas prices.

Gasoline wholesalers and retail dealers said the price of gas remained stable overnight.

Wholesale gasoline prices have been on a rocket ride for the last two months, but motorists didn't really begin to feel the pinch at the pump until a few weeks ago. Self- serve pump prices around the Bay Area for the three main grades yesterday were about $1.60, $1.70 and $1.80 per gallon. Careful shoppers could find stations offering prices 10 to 15 cents lower, but those dealers said they were taking a loss.

A spokesman for Rotten Robbie, an off-brand chain of 28 stations from Santa Rosa to Salinas, said his stations were taking a loss to protect their customer base.

"We live and die by volume, and do everything we can to maintain that volume," said Jerry Cummings, president of Coast Oil and co-owner of the Rotten Robbie chain. "We're taking a terrible beating right now."

Rotten Robbie, which in recent years has undercut major brands by 7 to 12 cents a gallon, finds itself pricing gas at about the same level as Arco, which holds the biggest share of California's market and is typically the lowest priced among the big companies, which also include Shell, Chevron, Unocal, BP and Exxon.

Yesterday, most Rotten Robbie stations were selling gas for $1.44, $1.55 and $1.63 per gallon.

Since February, wholesale prices have jumped from 50 to 60 cents per gallon to $1 per gallon as of this week, Cummings said.

Add to that 37 cents per gallon in state and federal taxes, plus another 7 to 8 percent for sales tax, and it knocks the stuffing out of the profit margin, Cummings said.

Fuel prices have been climbing nationwide but appear to be going up further and faster in California. Oil industry experts blame the increase on a seasonal supply shortage, an increase in demand, a rise in the price of crude oil and new state requirements that refiners produce a less-polluting, reformulated gasoline.

Another factor limiting the supply is a series of fires and accidents that have interrupted production at four of the state's 13 refineries. And because of California's tougher clean-air requirements, extra supplies cannot be brought in from refineries outside the state.

Industry experts are expected to point out Thursday that the California Air Resources Board has the power to waive clear-air regulations and permit the temporary use of gasoline refined outside California.

Refiners also lowered their inventories earlier this year in anticipation of a U.N. agreement that would have freed Iraq to sell $2 billion worth of crude oil on the world market, a deal that remains under negotiation.

"They were gambling short by drawing down their reserves . . . (and) gambling they could replace their expensive oil with cheap oil," said Imbrecht.

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